Australian leader hints at a clean energy target by year's end

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SYDNEY, Aug 28 (Reuters) - Australia could adopt a clean energy target by the end of the year, heeding the call of national energy providers and scientists as a means to cut carbon emissions and cap soaring power prices.

Australian Prime Minister Malcolm Turnbull said the government was “carefully considering” the recommendation by the nation’s chief scientist Alan Finkel as a way to ensure affordable, reliable and cleaner power.

“We’re certainly aiming to make a decision by the end of the year,” Turnbull told Australian Broadcasting Corp.

Finkel in June led a list of recommendations presented to the government aimed at ending a decade of political warfare over climate policy, meaning coal-fired power generation using carbon-capture technology could potentially be used alongside gas and renewable sources such as wind and solar.

Energy companies argue they need long-term policy certainty to invest in new power generation and bring down electricity bills - and the key to unlocking that was to roll out a national clean energy target.

The government is awaiting a report from the Australian Energy Market Operator, which Turnbull labeled “a critical thing” before moving to decide on a target.

“First, we need to be satisfied as to what the gap in baseload power is going to be over the next five and 10 years,” he said.

Finkel’s report was commissioned last October after tornadoes triggered a state-wide blackout in South Australia that came as a wake-up call to politicians as it left homes in the dark for up to eight hours and crippled industry for nearly two weeks.

The state has since contracted with Tesla Inc to build the world’s biggest grid-scale lithium-ion battery and is also installing a new solar thermal plant to replace coal-fired power.

“The lack of a transparent, credible and enduring emissions reduction mechanism for the electricity sector is now the key threat to system reliability,” the review said.

The energy crisis has crept up on Australia, despite its rich endowment of coal and gas, as individual states have promoted rooftop solar and wind power in the absence of stable carbon policy at a federal level, and coal- and gas-fired plants have shut. (Reporting by James Regan; editing by Susan Thomas)